In a putative class action, the court’s decision about whether to certify the class is always one of the case’s most important rulings—if not the most important ruling. The right to appeal that decision is limited. Some clever plaintiffs’ lawyers had found a way around that limitation, but the U.S. Supreme Court recently blocked their route.
The case, Microsoft Corporation v. Baker, involved the company’s popular gaming console Xbox 360. According to the consumer plaintiffs, their Xbox 360s damaged software discs during normal game-playing conditions. The gamers moved for class certification, but the trial court denied their motion. The gamers then tried to appeal, but the appellate court disallowed it, which the relevant rule (Civil Rule 23(f)) gives them discretion to do. Undeterred, the gamers then voluntarily dismissed their individual cases with prejudice, meaning they could not refile their lawsuit later. That procedure supposedly yielded a final order, which the gamers could appeal just like any other final judgment.
Because federal appellate courts disagreed about the viability of that tactic, the Supreme Court agreed to hear the appeal. Justice Ruth Bader Ginsberg, writing for a six-justice majority, rejected the gamers’ arguments. Their dismiss-and-appeal procedure, she wrote, is an improper end-run around the discretionary practice the federal judiciary created when it adopted Civil Rule 23(f). Also, the dismissal gambit unfairly prejudices defendants because they have no similar guaranteed means of obtaining review before final judgment.
Microsoft is a critical victory for class-action defendants. When courts formerly allowed appeals after voluntary dismissals, plaintiffs had the ability to string out class actions far longer than should have been permitted. And plaintiffs did it a lot, because the cost to them was minimal and the potential upside (getting an adverse class-certification decision reversed) was enormous. Of course, some jurisdictions, like Ohio for instance, allow automatic appeals of all class-certification decisions. But at least those appeals are allowed to both sides, making the process fairer. Parity has been restored to federal courts.